Plus, Uber shares are down on reports that SoftBank is selling $2.1 billion of its stake in the ride-hailing company, DiDi shares surged on reports that it is going private, and Robinhood makes its public debut today.
Stocks were slightly at the open on Thursday with the Dow adding 55 points, or 0.1%. The S&P 500 and Nasdaq both rose less than 0.1%.
A federal grand jury charged Nikola founder Trevor Milton with three counts of fraud, sending the company’s stock more than 8% lower this morning. According to the indictment, Milton has been accused of lying about “nearly all aspects of the business” in order to boost the stock. Milton, who resigned in September 2019 amid scandal, is facing two counts of securities fraud and one count of wire fraud. “Milton sold a version of Nikola not as it was—an early stage company with a novel idea to commercialize yet-to-be-proven products and technology—but rather as a trail-blazing company that had already achieved many groundbreaking and game-changing milestones,” according to a complaint filed by the SEC. “In presenting his version of Nikola to investors, Milton repeatedly made false and misleading statements about core aspects of Nikola’s products, technological advancements, and commercial prospects.”
Uber shares are down nearly 3% at the time of writing after reports that SoftBank is selling $2.1 billion of its stake in the ride-hailing company through Goldman Sachs. SoftBank, which is Uber’s largest investor, is trimming its stake in the company in part to cover its losses on its investment in Chinese ride-hailing company DiDi. SoftBank aims to sell 45 million shares with a price of between $44.15 and $46.14, according to people familiar with the details. The news comes just a week after Uber shares were lifted slightly after the company’s trucking unit announced it is acquiring shipping software company Transplace for around $2.25 billion.
Speaking of DiDi, the stock has whipsawed today, surging as high as 40% in premarket trading after the Wall Street Journal reported the company is considering going private to placate Chinese regulators and compensate investors for losses, before dropping to up just 10% at the time of writing after DiDi denied the report. Didi listed its shares on the NYSE back in June with the stock plummeting just days after the IPO after Chinese regulator announced a cybersecurity review of the business as well as an antitrust probe into the company.
Yum Brands shares are up more than 5% this morning after the company delivered an earnings beat. Yum posted earnings per share of $1.16 on revenue of $1.6 billion, versus estimates for earnings per share of $0.96 on revenue of $1.48 billion. The company reported same-store sales growth of 23%, with its KFC brand seeing same-store sales growth of 30% and Pizza Hut and Taco Bell also seeing growth higher than expected. Comcast also delivered a beat, reporting adjusted earnings per share of $0.84 on revenue of $28.55 billion, while analysts were anticipating a reading of earnings per share of $0.67 on revenue of $27.18 billion. The beat came on the strength of Comcast’s internet business, which saw record net additional subscribers of 354,000 in the quarter.
And Robinhood sold shares in its IPO at $38 a piece, valuing the company at around $32 billion. Robinhood priced the shares at the low end of its $38 to $42 range ahead of its Nasdaq debut later today. The trading app, which will trade under the ticker HOOD, sold 52.4 million shares, raising nearly $2 billion. Robinhood has been under increased regulatory scrutiny after the GameStop frenzy earlier this year, with lawmakers concerned that the app is “gamifying” trading and misleading its unsuspecting retail traders, with the Financial Industry Regulatory Authority fining Robinhood a record $70 million last month for misleading customers and approving risky options trades.
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A10 Networks Inc (NYSE: ATEN): A10 shares jumped as much as 13% yesterday after the company announced revenue growth of 12.7% year-over-year in the second quarter. “Our focus on customer-centric product innovation and on driving improvements in commercial execution is beginning to deliver results, with consolidated revenue growing double-digits in the second quarter and EBITDA growing faster than that rate,” Dhrupad Trivedi, President and Chief Executive Officer of A10 Networks, said in the earnings release. “We gained market share, adding new customers and expanding our security-led sales with existing customers. As expected, Japan again grew year-over-year during the quarter. Our customer engagements, strength of funnel and improving execution reinforce our confidence in full year growth targets while building a diversified customer base for the future.”